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ILLINOIS STATE BUDGET CRISIS AT A GLANCE: REVENUE DOWN, SPENDING UP, NO ONE IN CONTROL AND NO END IN SIGHT

BACKDROP: Gov. Bruce Rauner delivers his 2016 Budget Address on Feb. 17. He’s in an awkward situation: The Budget Address is intended as a preview of the Illinois state budget for fiscal year 2017, which starts July 1. State government has yet to adopt a budget for FY 2016, which started last July 1.

Making matters worse, without a budget to cut spending or raise more revenue, state government since July 1 has been spending far more than it’s taking in. Taxpayers will have to make up the difference whenever Rauner and the Democrat-controlled General Assembly pass a budget. The longer the current budget impasse continues, the bigger the hit on taxpayers will be. And with indications now that all sides are squeamish about voting on any tax increases before the Nov. 4 elections, we could be well into FY 2017 before we even begin to pay down the state’s debts of FY 2016.

Here’s a quick look at how things stand as Rauner delivers his second Budget Address without having signed his first budget.

Much of Wednesday’s discussion centered on the legacy of the Plan for Transformation, a controversial chapter of Chicago’s public housing history. In 2000, the city embarked on a $1.6 billion initiative to tear down its beleaguered public high-rises, pledging to replace them with 25,000 new or rehabilitated units in “mixed-income” communities. While more than 18,000 units were demolished in the plan’s first decade, rebuilding is now nearly six years behind schedule and still inching towards completion. Advocates say that CHA’s policies have driven thousands of poor, Black residents out of the city.

“Six years later, we’re still short 2,000 units,” said Dearborn Homes resident Etta Davis, a supporter of the ordinance. “We listened to CHA when they said they had a plan, but now we’re asking for a promise in writing.”

Chicago’s own staggering reserves were discovered in 2014, after a series of public records requests turned up some murky accounting, said Amanda Kass, an analyst at the Center for Tax and Budget Accountability and another proponent of the ordinance. According to her organization’s analysis, between 2008 and 2012 the agency squirreled away much of the federal money allocated for housing vouchers, issuing 13,000 fewer vouchers than it could have each year.

Instead, her organization discovered, the CHA quietly used $250 million of reserves to pay down its debt early, earning it the highest credit-rating of any public housing agency nationwide. While that makes it an attractive prospect for investors and could entail long-term savings, advocates argue it does little to advance the agency’s core mission of providing housing to Chicago residents.

As the budget battle in Illinois continues, a government watchdog group says the state's finances have been running on "autopilot."

Gov. Bruce Rauner is to give his second budget address today to lay out priorities for next year - but the state has been operating for about eight months without a budget for the current fiscal year.

Bobby Otter, budget director for the Center for Tax and Budget Accountability, helped author a new report that shows that if lawmakers continue to do nothing, more than $3 billion could be slashed from core services, including higher education.

"Not one elected official, be it in the General Assembly or the governor, has actually had to vote on that or sign that into law," he said. "They're kind of abdicating and punting their responsibilities here."

The report, titled "Illinois on Autopilot," also showed that even without an official budget on the books, state spending levels still are at about 90 percent. That's mostly to pay for health care and other court-ordered services.

The City Council’s Housing Committee will hold a hearing this morning on an ordinance that seeks to give City Council more oversight of the Chicago Housing Authority and ensure the agency uses its resources to address the city’s public housing shortage.

The “Keeping The Promise” ordinance drafted by Ald. Joe Moreno (1) in partnership with the Chicago Housing Initiative, a coalition of community organizations that work with low-income renters, accuses the CHA of failing to spend hundreds of millions in federal funds between 2009 and 2013. Citing data from the Center for Tax and Budget Accountability (CTBA) in the preamble of the ordinance, Ald. Moreno accuses the CHA of not circulating roughly 13,000 funded housing vouchers and leaving 4,600 public housing units vacant over the same four-year period.

SPRINGFIELD, Ill. - As the budget battle in Illinois continues, a government watchdog group says the state's finances have been running on "autopilot."

Gov. Bruce Rauner is to give his second budget address today to lay out priorities for next year - but the state has been operating for about eight months without a budget for the current fiscal year.

Bobby Otter, budget director for the Center for Tax and Budget Accountability, helped author a new report that shows that if lawmakers continue to do nothing, more than $3 billion could be slashed from core services, including higher education.

"Not one elected official, be it in the General Assembly or the governor, has actually had to vote on that or sign that into law," he said. "They're kind of abdicating and punting their responsibilities here."

The report, titled "Illinois on Autopilot," also showed that even without an official budget on the books, state spending levels still are at about 90 percent. That's mostly to pay for health care and other court-ordered services.

While that might have some people thinking the state has been spending less overall, Otter said, it's not actually the case. Illinois is on track to spend much more than it takes in, to the tune of about $2 billion. Otter is encouraging the governor and lawmakers to either raise taxes or find strategic cuts and then actually vote on them.

"One of the main jobs of our elected officials is to make those hard decisions, if we need more revenue, than to raise more revenue," he said. "Or, if we don't have enough revenue, then what services will have to be scaled back or cut."

The center, along with trade groups such as the Illinois Manufacturers' Association, has suggested that Illinois could help close its budget gap by taxing service industries.

Illinois lawmakers may have to find other creative ways to manage its cash flow. The state’s revenues through FY19 are projected to dwindle by 4.5% to USD 34.2bn in FY19 from USD 35.8bn in FY15 as its expenditures rise by 11.1% to USD 39.3bn in FY19 from USD 35.4bn in FY15, according to the three-year budget projection.

While the General Assembly passed and the governor signed a K-12 education budget for FY16, it is possible for the state, via the Illinois State Board of Education, to lower their payments to school districts in coming months to manage cash flow issues, said the Center for Budget and Tax Accountability’s Bobby Otter. Most of those funds are considered grants.

Illinois lawmakers passed legislation to help the state with cash flow issues under former Governor Quinn, giving the state six months rather than two months to catch up on the last fiscal year’s contractual obligations. The state has already been tapping this law to manage cash flow and plans to use this mandate again, said the comptroller’s spokesperson.

Last year, the Illinois legislature swept a number of different funds in order to make it through the fiscal year. The state legislature could do this again, Otter said. However, this would require
an agreement between the general assembly and governor, Otter said.

One thing on which lawmakers from both parties agree is that while state law requires the governor to present his budget plan for next year, Rauner’s speech needs to focus on resolving the current impasse, too.

SPRINGFIELD — One week after President Barack Obama called for bipartisan compromise in a speech before the Illinois General Assembly, Gov. Bruce Rauner on Wednesday will address that still deeply divided body about his plan for next year’s state budget.

Ever hear the old adage: "Money is the root of all evil"? Of course you have, it's a classic. Current events in Illinois, however, suggest it should be updated. Because in our great state, it's pretty clear that a lack of money is just as, if not more, pernicious. For proof, just consider the recent proposal to allow the Chicago Public Schools to declare bankruptcy.

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